Trading bots create extreme events faster than humans can react. High-frequency trading is the practice where automated systems search for minor differences in price of stocks that can be exploited for small financial gains. Executed often enough and with a high enough investment, they can lead to serious profits for the investment firms that have the wherewithal to run these systems. The systems trade with minimal human supervision, however, and have been blamed for a number of unusually violent swings that have taken place in the stock market. A new paper has gone searching through historic trading for these sorts of glitches and ended up finding a lot of them—over 18,000—all of which took place too fast for human intervention to have driven them. When they generated a mathematical model of this trading, they found that they showed indications of many traders executing a similar strategy, exactly as you'd expect from automated trading systems.
The primary victims of these glitches? The stocks of the investment banks themselves. So you want to invent your own currency – Brett Scott. I don’t have much money. Then again, I couldn’t say exactly how much I do have. In the Co‑operative Bank’s IT system is a database entry that says I have £97 in electronic money. In my wallet I have three £10 notes, pieces of paper with pictures of the Queen on them, issued by the Bank of England, promising me £30. I have six pieces of metal, too — copper-nickel alloy and nickel-plated steel, to be exact — valued at 59 pence in total. My wallet also contains a £5 Brixton Pound note — a local currency found only in the south London neighbourhood where I live — which I got as change from a local bar called Kaff.
That’s not all. I, too, was once a counterfeit of sorts. How can a piece of paper store 10 pounds of value? The trouble is, while my experiences in mainstream finance taught me a lot about what the industry does, they only gave me glimpses into the nature of the mysterious stuff it does it with. Most people never get this opportunity. Money is a complex cultural technology. Robert Scheer: If Corporations Don’t Pay Taxes, Why Should You? - Robert Scheer's Columns. If Corporations Don’t Pay Taxes, Why Should You?
Posted on Mar 12, 2013 By Robert Scheer Go offshore young man and avoid paying taxes. Plunder at will in those foreign lands, and if you get in trouble, Uncle Sam will come rushing to your assistance, diplomatically, financially and militarily, even if you have managed to avoid paying for those government services. Just pretend you’re a multinational corporation. That’s the honest instruction for business success provided by 60 of the largest U.S. corporations that, according to a Wall Street Journal analysis, “parked a total of $166 billion offshore last year” shielding more than 40 percent of their profits from U.S. taxes. But they all still expect Uncle Sam to come to their aid with military firepower in case the natives abroad get restless and nationalize their company’s assets.
America’s multinational corporations still need the Navy to protect shipping lanes and the Commerce Department to safeguard U.S. copyrights. Was Mancur Olson Wrong? Question: Why is there a National Cotton Council but no National Anti-Cotton Council? After all, as you may or, more likely, may not know, the federal government subsidizes cotton growers to the tune of almost $2 billion a year (the average from 1995 to 2011). Unless you happen to be a cotton grower, you can probably imagine better uses for those federal dollars. Yet the cotton program, a New Deal vestige, goes on. And on. It has a lobby, of course. But why no counter-lobby? In 1965, a young University of Maryland economist named Mancur Olson (the first name is pronounced “mansir”) formulated a crucial part of the answer in his book The Logic of Collective Action.
Cotton, a classic narrow interest, illustrates the arithmetic. On the other hand, the cost of the program comes out to less than $6 per year per taxpayer, hardly enough to be worth organizing to oppose, or even to be worth learning about. But was it right all along? So the bumblebee flies, whatever Olson’s theory may posit. How Capitalism Creates The Welfare State. The two concepts are usually seen in complete opposition in our political discourse.
The more capitalism and wealth, the familiar argument goes, the better able we are to do without a safety net for the poor, elderly, sick and young. And that’s true so far as it goes. What it doesn’t get at is that the forces that free market capitalism unleashes are precisely the forces that undermine traditional forms of community and family that once served as a traditional safety net, free from government control. In the West, it happened slowly – with the welfare state emerging in 19th century Germany and spreading elsewhere, as individuals uprooted themselves from their home towns and forged new careers, lives and families in the big cities, with all the broken homes, deserted villages, and bewildered families they left behind. [The] nation’s runaway economic success … has worn away at the Confucian social contract that formed the bedrock of Korean culture for centuries.
It is unstoppable. How Amazon Trained Its Investors to Behave - Justin Fox. By Justin Fox | 10:43 AM January 30, 2013 In March 2000, Barron’s reported that 51 Internet companies were burning cash so fast that they’d be broke by the end of the end of the year. The article (it’s behind a seemingly unbreachable paywall) has acquired the reputation of having marked the end of the dot-com boom. The Nasdaq composite index peaked on March 10 at 5132, and by the end of the month was in a full-on collapse (as I write this, it’s only at 3155, despite years of gains). The Burn Rate 51 was made up mostly of now-forgotten companies like drkoop.com and CDNow. In fact, Amazon was only operating at such a high burn rate because it could. That opportunistic approach to financial markets has defined Amazon since it went public in 1997. So when Amazon reports below-consensus earnings, as it did Tuesday, and the share price jumps, as it did after-hours Tuesday and again Wednesday morning, the reaction isn’t quite the puzzle it seems.
How has Bezos done this? Country Club Sopranos. You wouldn't know it by watching the news or reading the paper, but America's banks are on the largest crime spree the country has ever known. Let's go to the highlight reel, shall we? In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites.
One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a "racial surtax. " The bank docked blacks nearly $3,000 extra for their own improper pigmentation. Wikimedia Commons Prosecutor and law professor G. Robert Blakey: "All of the people who ran the scams have their big houses and their airplanes, and they're laughing.
" Photo by Monika Golon "Retired criminal" Sam Antar: "It's almost like stealing a billion dollars with a pencil is not as bad. Courtesy Current TV Related Stories More About Across the country, in Minneapolis, U.S. U.S. Iran and the Petrodollar Threat to U.S. Empire. Iran poses a far more serious threat to the U.S. than its disputed nuclear aspirations. Over the last few years, Iran has unleashed a weapon of mass destruction of a very different kind, one that directly challenges a key underpinning of American hegemony: the U.S. dollar as the exclusive global currency for all oil transactions. It began in 2005, when Iran announced it would form its own International Oil Bourse (IOB), the first phase of which opened in 2008. The IOB is an international exchange that allows international oil, gas, and petroleum products to be traded using a basket of currencies other than the U.S. dollar. Then in November 2007 at a major OPEC meeting, Iran's President Mahmoud Ahmadinejad called for a “credible and good currency to take over U.S. dollar’s role and to serve oil trades”.
He also called the dollar “a worthless piece of paper.” China and India are by far the most significant players, with Russia playing a supporting role. How the Petrodollar System Works. Wealth doesn't trickle down – it just floods offshore, research reveals | Business | The Observer. The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.
James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system. Comedian Jimmy Carr became the public face of tax-dodging in the UK earlier this year when it emerged that he had made use of a Cayman Islands-based trust to slash his income tax bill.
"These estimates reveal a staggering failure," says John Christensen of the Tax Justice Network. Ppola Comment: The shoebox swindle. It's morning in the charming little village of Britham. A man - let's call him John - goes into his local bank. "I want to borrow £1000", he says. "Let's see what we can do", says the bank manager.
After close inspection of John's payslips and a few phone calls to local shops and tradesmen to check that John has always paid his bills and paid for his goods, the bank manager agrees to give him the loan. "l'll just sort that out for you now", he says. He disappears through the door into the back office. Once in the office, he gets out a shoebox. "Here you are", he says. John takes his shoebox to the bike shop to buy his son a bike for his birthday. Fred doesn't have £500 cash in the till, but he has another shoebox with an official bank stamp saying "£500" that someone gave him earlier. John takes the new shoebox to the grocer, where he buys his week's shopping and hands the shoebox over in payment. Opening the box takes him a while, because whoever sealed it used industrial-strength glue. Do Business Schools Incubate Criminals? The recent scandals at Barclays Plc, JPMorgan Chase & Co., Goldman Sachs Group Inc. and other banks might give the impression that the financial sector has some serious morality problems.
Unfortunately, it’s worse than that: We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame. Consider, for example, the revelations about two top executives at the elite consulting firm McKinsey & Co., which has avoided public vilification despite the transgressions of its former employees. McKinsey director Anil Kumar, -- a graduate of the University of Pennsylvania’s Wharton School -- pleaded guilty to providing insider information to hedge-fund manager and fellow Wharton alumnus Raj Rajaratnam. Rajat Gupta, a graduate of Harvard Business School who served for nine years as McKinsey’s worldwide managing director, was convicted of insider trading in the same case. Economics and Greed Free Competition. 24.jpg (JPEG Image, 580×464 pixels) Special Report: Crisis forces dismal science to get real. Mainstream Economics is a Cult.
Neoclassical Economics Is Based on Myth Neoclassical economics is a cult which ignores reality in favor of shared myths. Economics professor Michael Hudson writes: [One Nobel prize winning economist stated,] “In pointing out the consequences of a set of abstract assumptions, one need not be committed unduly as to the relation between reality and these assumptions.”This attitude did not deter him from drawing policy conclusions affecting the material world in which real people live….Typical of this now widespread attitude is the textbook Microeconomics by William Vickery, winner of the 1997 Nobel Economics Prize: “Economic theory proper, indeed, is nothing more than a system of logical relations between certain sets of assumptions and the conclusions derived from them… The validity of a theory proper does not depend on the correspondence or lack of it between the assumptions of the theory or its conclusions and observations in the real world.
“Our models show there is no chance of water” Who Creates Jobs (and Other Critical Questions) Europe's Zero-Sum Dilemma. EUROPE’S DEBT crisis is threatening a political order that has been built up over the course of more than a half century. It is still entirely possible—indeed likely—that the European single currency will not survive the crisis. Angela Merkel, the German chancellor, has predicted that if the euro collapses, the European Union will crumble with it. The destruction of the EU would, in turn, remove the organization around which postwar European politics has been constructed. Even if both the EU and the single currency survive, the current crisis is likely to extract an economic and political price that makes a mockery of many of the original hopes invested in the European Union.
The founding fathers of the EU—men such as Jean Monnet and Robert Schuman—built their project around a brilliant and simple proposition. The purpose of the European project when it got going in the 1950s was explicitly political. D4907WW0.jpg (JPEG Image, 555 × 359 pixels) Of the 1%, by the 1%, for the 1% | Society. It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided.
Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. Some people look at income inequality and shrug their shoulders. First, growing inequality is the flip side of something else: shrinking opportunity. Economists are not sure how to fully explain the growing inequality in America. Reagan Sucked. Deal With It. L.A. calls for end to 'corporate personhood' This post has been corrected. See the note at the bottom for details. At a packed City Council meeting that included remarks from a man in a top hat with fake money tucked in the pocket of his suit, Los Angeles lawmakers Tuesday called for more regulations on how much corporations can spend on political campaigns. The vote in support of state and federal legislation that would end so-called "corporate personhood” is largely symbolic.
But activist Mary Beth Fielder, who spoke in favor of the resolution, called it “a symbol that’s going to be heard around the world.” The council resolution includes support for a constitutional amendment that would assert that corporations are not entitled to constitutional rights, and that spending money is not a form of free speech. City Council President Eric Garcetti, the resolution's sponsor, said such actions are necessary because “big special interest money” is behind much of the gridlock in Washington. He blamed a 2010 U.S. For the record, 3:36 p.m. The Scam Wall Street Learned From the Mafia | Politics News.
What has Europe ever done for us ? The 'Tax the Rich' Talk TED Deemed 'Too Political' to Post (UPDATE: Now with Video) How willpower works - Health & wellness. Romney’s Former Bain Partner Makes a Case for Inequality. 6 Things Rich People Need to Stop Saying. Bc video: Paul Krugman talks with Rachel Maddow. Not What the Doctor Ordered: 20 Million Could Lose Employer Coverage. Noam Chomsky on America's Economic Suicide | Economy. Robert Barro: Stimulus Spending Keeps Failing.
Pavan Sukhdev: Put a value on nature!